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1. The Parliamentary Assembly notes that, under the Israeli/Palestine Liberation Organisation (PLO) Agreement of 13 September 1993, the matter of refugees is one of the "permanent status" issues for negotiation to be completed by May 1999.

2. The Assembly deplores the lack of progress regarding these negotiations and welcomes the renewal of talks following the visit of the Secretary of State of the United States of America to the region in September 1997. The Assembly also emphasises the role of Europe in accelerating the peace process.

3. The Assembly accepts that United Nations General Assembly Resolution 194 (1948) refers to the right of return for all refugees to their homes and compensation for those choosing not to do so, but that after fifty years this will be politically and practically difficult to achieve.

4. The Assembly also accepts that the present situation of the 3.4 million refugees registered with the United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA) in the host countries, of whom over a million live in camps, must be resolved by resettlement to permanent accommodation, not only for humanitarian reasons but also as an essential step towards ending a major source of insecurity and tension in the region.

5. The Assembly believes that this will not be possible without the establishment of a viable Palestinian state which can provide the refugees with citizenship and internationally recognised passports.

6. Once this is achieved, the Assembly considers that the refugees can be offered a choice of options for a durable solution to be agreed between Israel and the Palestinian Authority (PA) and with the other countries concerned.

7. These options are:

i. to resettle in the new Palestinian state;

ii. to remain in the host countries with rights to property and jobs and possible citizenship;

iii. to resettle in other countries outside the region;

iv. to return to the Gulf states, where applicable;

v. to return to Israel.

8. The Assembly considers that the services of the UNRWA must be fully maintained until a permanent solution is achieved, and that the cost of resettlement must be additional to existing funding of UNRWA to ensure a seamless transfer of its services to the governments concerned.

9. The Assembly considers that a new fund should now be established by the United Nations to finance the forthcoming cost of resettlement: the Palestine Refugee and Displaced Persons Final Status Fund (the "Fund").

10. Accordingly, the Assembly:

i. calls on the United Nations to alert member states to prepare in their budgets for donations to the Fund, and to approach, in particular, those countries which do not generously donate to the UNRWA, with a view to their donating generously to the new Fund;

ii. urges Israel to enable the Canada Camp-Tel Al-Sultan relocation project to be completed as soon as possible;

iii. urges the parties involved with the commissioning of the new Gaza hospital to agree on its future financing so as to ensure that it opens without any further delay;

iv. calls on Lebanon to emulate other host countries in the provision of services to the Palestine refugees, in addition to those provided by the UNRWA;

v. invites the Palestinian Legislative Council to strengthen its co-operation with the Assembly, in particular by encouraging its members to attend meetings organised by the relevant Assembly committees, in accordance with Resolution 1013 (1993).

11. The Assembly is aware of the recent pilot study for the compilation of a computerised database of the registered refugees for the UNRWA and the Palestinian Authority. It urges the member states to consider how such a database can contribute to a resolution of the refugee situation, including claims for compensation, and to support its financing at a cost of US$7 million so that it can proceed.

12. The Assembly notes the concern of many parties that there has been a lack of political and academic study of the refugee problem and questions of compensation, and urges member states to encourage and commission such vital work.